By Leo Fasciocco -- TTD
Ticker Tape Digest presents its daily stock market report containing stocks to go long as breakout trades, quick trades, or bargain trades. We also feature stocks under Significant Accumulation that are poised to breakout.
Ticker Tape Digest's Trading Strategies Overview and Performance
Aggressive Investors Bullish - "Breakout Stocks" - ideally suited for bull markets and special situation stocks. Potential for large returns.
Aggressive Investor Bullish- "Quick Trade Stocks" -ideally suited for entry into top performing issues looking for a small quick profit."
Conservative Investors "Bargain Buy Trades" (swing trades). Ideally suited for entry into stocks on pullbacks within overall up trend. Good for trading range markets
Aggressive Bearish Investors - "Breakdown Stocks" to Sell Short. Ideally suited for bear markets or market pull backs. Potential for large returns
Conservative Bearish Investors (swing traders). "Bargain Bearish Plays" to Sell Short. Ideally suited for trading range markets with overall market down trend.
The TTD report also contains stocks to short as breakdown plays and as bargain (swing trade) shorts.
Investors should tend to try to go with a strategy that fits with the stock market's trend, unless there is a special situation play.
TTD's Breakout Stocks - Long are most suitable for aggressive investors seeking ideal entry points into leading stocks, especially during bull markets. They can do extremely well in bull markets with gains of as much as several hundred percent.
These stocks can also do extremely well during strong market rallies, or if they are in a industry group that is performing very well. They tend to have strong earnings outlooks and are near new-52 week, or all-time highs.
TTD Quick Trade Stocks - Long These are leading issues that have pulled back in recent days, but could move higher soon. They are most suitable for Aggressive Investors willing to trade short term. These stocks will do extremely well during market advances. They have about 74% win rate. During market rally sequences the win rate is even higher. The return is small 3% to 8% in just a few days.
TTD's Bargain Buy Trades - Long These are for conservative bullish Investors The strategy is called swing trading. These long buys are ideally suited for entry into stocks on pull backs within overall up trend. They are good for trading range markets. These stocks can give a good return in a week or two. They can also explode into a breakout and a powerful advance.
TTD also presents Stocks To Sell or Sell Short. These issues are suitable for aggressive investors willing to take short positions both as trades or for longer-term plays. These stocks will do very well during bear markets or market pull backs.
TTD's Bearish breakdown stocks to sell short. These issues have potential to fall sharply. They often show a technical breakdown and also some fundamental business problem such as weak earnings.
TTD's Bearish bargain play stocks to sell short. These issues are usually in down trends and are poised to rollover after a minor rally. They often can provide a conservative bear with a good entry point.
TTD's multi-media updates include a slide-show that presents charts and analysis at midsession. Some times TTD presents feature analysis on stocks and the market. TTD uses Windows Media Files. (WMV).
TTD also presents a "Breakout Watch List" that is up dated daily. This list consists of key stocks in position to breakout. A close watch of this list can put you in the stock just as it breaks out. A good idea is to study the list and be ready to move into a stock quickly as it hits its breakpoint.
TTD often suggests using stop buy orders to enter. It is very important to buy a breakout stock as close as possible to the breakpoint. The idea is to get "elbow room" if the stock should follow through to the upside. This is very important in being successful in making big money with breakout stocks.
It is also essential to have a stop loss strategy for all stocks in which positions are taken. Not every stock will work as expected. It is important for investors to "police" their portfolios and avoid getting trapped in any bad positions.
Quality rating of breakout Two key factors: 1 - Stock near all-time in price or near a 52-week high. 2 - earnings growth current year is strong. The ideal play is a stock with an Above Average Quality Rating. The stock is near a new high and will have strong earnings.TTD's other ratings are Average and Below Average.
TTD also has special feature sections on Educational Tips on Investing.
To email Mr. Leo Fasciocco email@example.com.For service, email Beverly Owen firstname.lastname@example.org. TTD’s Tel: 1-480-926-1680.
Breakout StocksTotal Buy Breakouts so far today - 8
Stocks Screened - 8,200
Bull side - Breakout list small today, but some very good looking growth stocks. Bulls can be venturesome. Stock market lifts. Market still vulnerable but appears to have chances to hold a trading range.
(Put mouse on Dow chart to see Nasdaq chart)
Long Term Environment for bulls: Favorable
Market (Daily) - NYSE Bearish, Nasdaq Bearish
Market (Weekly) - NYSE Bullish, Nasdaq Bullish
Market (Monthly) - NYSE Bullish, Nasdaq Bullish
TTD's Quality Rating of Stock - ESRX - ABOVE AVERAGE
ESRX, based in St. Louis, is a pharmacy benefit management company. Annual revenues: $22.1 billion. ESRX's stock breaks out from a 5-week flat base today and makes a new all-time high. It is one of the few stocks to reach an all-time high following the recent bear market. It is also a favored TTD long-term buy and hold play. ESRX is trading 1.9 million shares so far today. The stock's average daily volume is 1.7 million shares.
TTD highlighted ESRX as a breakout at our midsession show on the Web Tuesday.
ESRX's 10-minute chart shows the stock breaking out in the morning. Volume picked up a bit after the breakout.
The stock had a modest pullback after the breakout, but then turned and moved higher. The action was very good for the bulls.
ESRX's tape action shows the recent big block trades. One can see the price for the blocks climbing from $102.81 on Monday to a peak of $104.53.
A key trade came when a block of 15,262 shares crossed at $103.25. That was up sharply from the prior block trade at $102.81. The tape action indicated aggressive institutional buying in the morning and then picking up again around midday.
The company provides services to health maintenance organizations, health insurers, third-party administrators, employers, union-sponsored benefit plans, workers’ compensation plans and government health programs.
ESRX operates in two areas: Pharmacy Benefit Management Services and Specialty and Ancillary Services.
Its PBM services include retail network pharmacy management; retail drug card programs; home delivery pharmacy services; benefit design consultation and compliance and therapy management programs.
ESRX's 12-month performance chart shows the stock appreciating 80% versus a 45% gain for the S&P 500 index. That is a good performance for a big cap issue.
ESRX's long-term chart shows the stock rallying back strong after the recent bear market. A stock with strong earnings that makes it back to a new high before most other stocks is a leader. That is what ESRX is so far in this market. Since 2004 the stock has quadrupled. It is an institutional favorite.
ESRX's daily chart shows the stock moving higher from 75 to 100. The stock then set up a flat base. The gap move in February was due to strong profits.
The current base is small. So, on need to be watchful. Also, the volume on the breakout is not that robust. A key will be to see if ESRX can follow through on its breakout today with a pick up in volume.
The TTD momentum indicator (top of chart) is slightly bullish.
The accumulation - distribution line is strong. It is trending higher and today breaks out complimenting the action in the price of the stock.
ESRX should show a big pickup in earnings for 2010.
The Street currently expects ESRX's net for 2010, net to jump 38% to $4.92 a share from $3.58 a year ago. Next year, 2011, net should rise 27% to $6.25 a share. That is strong earnings for such a big firm.
The stock sells with a price-earnings ratio of 21 based on 2010 net. TTD sees that as attractive for value-growth investors.
Net for the upcoming first quarter should rise 27% to $1.09 cents a share from 86 cents a year ago. The highest estimate is at 1.18 cents a share. ESRX tends to come in close to the consensus. However, in the prior quarter it topped the consensus by 8%. TTD sees chances for another upside surprises.
Strategy Opinion: TTD is very bullish on ESRX. It has the look of a steady climber that is part of a strong industry sector. However, the base is small. So, we would suggest scaling into this breakout play. TTD is targeting ESRX for a move to 120 within the next few months. A protective stop can be placed near 95 TTD rates ESRX a very good intermediate-term play, especially for conservative investors.
Sponsorship: Very Good. The largest fund holder is Davis NY Venture Fund, 3-star rated, with a 2.2% stake. A key buyer recently was 4-star rated GMO Quality III Fund which purchased 1.2 million shares.. ESRX has 274 million shares outstanding.
Insider Activity: Neutral. Insiders were buyers using stock options. They turned around and sold. The latest selling was at $98.64. Currently, 29 analysts follow the stock, 25 have a buy, the same as three months ago.
Stock Performance Chart for 12 months with Quarterly Earnings Markers.
TTD's Breakout Profile Rating
Express Scripts Inc. - (ESRX)
|TTD Check List||Bullish||Bearish||Neutral|
|Near 52-week High||YES|
|Price Trend - Daily||YES|
|Price Trend - Long Term||YES|
|Price Daily Spread||YES|
|Base - A-D||YES|
|Prior Breakout Success||YES|
(The “breakout List” gives all stocks breaking out of a base of five weeks or more. These stocks have a good chance to trend higher. However, a stop should be used to avoid those that do not work. They are ranked according to percentage change and classified as leaders or other. (Trading strategy: One should buy breakout stocks at breakpoint by using market order or stop buy)
Charts of Selected Breakout Stocks
|TTD's Quality Rating of Stock - EZPW - ABOVE AVERAGE|
|TTD's Quality Rating of Stock - CYH - AVERAGE|
|TTD's Quality Rating of Stock - PHG - AVERAGE|
|TTD's Quality Rating of Stock - BWA - AVERAGE|
Ticker Tape Digest’s Daily List of “Stocks To Sell Short” ranks stocks well timed to be sold immediately based on daily trading. The list can be used as an alert to reduce current long-term positions.
Shorts from tape action so far today - 3
Stocks Screened - 8,2007
Long-Term Environment for bears: Unfavorable.
Bear Side - Only a few breakdown stocks today. Bears remain patient and selective.
(Trading strategy: These stocks can be sold short, or if held should be sold. If a stock is sold short, a protective stop buy should be placed. Short plays work best when the stock market is in a down trend.)
AKS, based in West Chester, Ohio, produces steel. Annual revenues: $4.1 billion. AKS's stock falls sharply today after the company reported disappointing earnings for the first quarter. The company also decline to estimate results for the second quarter. Today, the stock undercuts key technical support. So far today, AKS is trading 31.2 million shares, almost four times is normal daily volume of 1.9 million shares. TTD sees more on the downside.
AKS fell steadily in the morning. It had a minor lift around 10 a.m. However, in the afternoon it drifted lower again.
TTD's clip of the tape shows the recent big block trades. A key trade took place late on Monday when a big block of 200,000 shares crossed at $20.53. That was down sharply from the prior block trade at $20.72.
The block trades on Tuesday continued to work lower with a block late in the morning crossing at $19.56. The tape action indicated aggressive institutional selling pressure.
AKS said net for the first quarter was 2 cents a share compared with a loss of 67 cents a share a year ago.
The 2 cents a share was well below the consensus estimate on the Street of 25 cents a share. The lowest estimate was at 21 cents. So, the results were a big disappointment.
AKS makes flat-rolled carbon, stainless and electrical steels, and tubular products.
The company’s operations consist of seven steelmaking and finishing plants.
For the year, analysts were forecasting a profit of $1.41 a share compared with a loss of 65 cents a year ago. The 2010 estimate probably will be reduced.
AKS's daily chart shows the stock breaking below key support near 20.57. The TTD momentum indicator (top of chart) has been bearish for several weeks. The accumulation - distribution line (bottom of chart) is rolling over indicating clear selling pressure.
Strategy Opinion: TTD is targeting AKS for a drop to 15.50 within the next few months. A protective stop buy can be placed near 20.90
TTD columnist Leo Fasciocco has covered the stock market for over 20 years. His articles appear in many publications. He is also a speaker at the Intershow conferences. He has been on television and radio. He is author of many educational articles about stock investing and the book “Guide To High-Performance Investing.”
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(The information contained has been prepared from data deemed reliable but there is no guarantee of complete accuracy. Ticker Tape Digest Inc. is not affiliated with any broker, dealer or investment advisor. Nothing in this publication constitutes an offer, recommendation or solicitation to buy or sell any securities. Further research is advised. This report is copyrighted and no redistribution is permitted with out permission. Some of the charts are from Telescan, Insight Trading, First Alert and other sources.)